Victory! Chained CPI Out Of The Obama Budget

February 21, 2014

Roger Hickey

Great news! The Associated Press reported on Thursday that an unnamed Obama administration official (speaking on background) announced that the chained CPI will not be in President Obama’s budget. Just so we all really believed this signal, the White House Office of Legislative Affairs emailed out the AP story a few minutes later.

This represents a victory for populists who want politicians to fight for the majority of real Americans facing tough economic realities at work and in retirement. Apparently the bad idea of means-testing Medicare will still be in the budget, but the disappearance of the chained CPI is a win to be savored and built upon.

This should be chalked up as another triumph for the rising new populist electorate – and a powerful message to politicians that the old Washington game no longer works. It is harder and harder to do the bidding of powerful elites in the halls of Congress while pretending to be on the side of the voters.

The chained CPI was always a negotiating ploy – an offer by the White House to show Republicans that Democrats were willing to ignore the real retirement crisis in America in order to validate the conservative claim that Social Security was somehow contributing to an overblown deficit crisis. Social Security has its own funding stream and contributes not a penny to federal deficits. But the chained CPI, which would have meant immediate and serious cuts to people on Social Security, was repeatedly offered as a way for the White House to prove they were so serious about deficit-cutting they were willing to harm one of the most vulnerable groups that Democrats profess to care about.

This new victory over the Pete Peterson-style austerity-mongers is only the latest battle in a long war. And with each fight a stronger and stronger grassroots movement has been growing to protect – and expand – the very popular crown jewels of the New Deal and Great Society. We turned President Clinton away from his dalliance with partial privatization of Social Security – and then we stopped George W. Bush dead in his tracks when he tried to make real privatization the centerpiece of his second term.

As we mobilized with facts about the crucial importance of Social Security and Medicare and Medicaid in an era of recurring economic crises, the pro-social insurance movement grew – led by seniors and unions, the groups who got those programs passed in the first place. But organizations representing women and African Americans and Hispanics reminded their constituencies how important Social Security is to their economic security. And activist young people, now burdened by student loans and a lousy job market, came to realize the value of retirement and health care systems they could count on.

While many Democrats have been with us every step of the way, this decision by the White House liberates many others to revive their inner populism as staunch defenders of Social Security. For way too long the prospect of a “grand bargain” trading Social Security cuts for long-awaited (but never delivered) Republican agreement to raise taxes has kept too many Democrats in limbo, feeling that they needed to be able to support their president in such a deal.

Now Democrats are free – in the run-up to the midterm congressional elections – to campaign as strong defenders of Social Security, Medicare (without means-testing) and Medicaid. This liberation comes just in time because Republicans, opportunists that they are, have never been shy about accusing Democrats with trying to cut these programs. The chained CPI proposal gave a ring of truth to Republican lies. In midterm elections, the voters who come out reliably are seniors – and now Democrats would be smart to run as defenders of Social Security and Medicare, and as truth tellers who remind voters of attacks on these programs embedded in the Ryan budget and the proposals of other GOP “young guns” and tea-party leaders.

And the new American electorate – young people, African Americans, Hispanics, women, and working men and women – the electorate that elected and re-elected Barack Obama needs to be given a reason to come out to vote. Democrats must first have a jobs message – about how conservatives have crippled the recovery and stood in the way of progressive plans to create jobs. But in addition to jobs, progressive candidates could draw these voters back to the polling stations by making the election a referendum on Republican plans to cut Social Security and Medicare, and on Democratic plans to defend, strengthen and expand them.

Today’s populist message – now embraced by hundreds of Members of Congress and a growing number of Senators – has flipped the debate from protecting social insurance to the more compelling vision of expanding Social Security for retirees who increasingly have no pensions and little savings. Legislation to expand Social Security and improve benefits, while strengthening the program’s finances, has been introduced and supported by Senators Tom Harken (Iowa), Mark Begich (Alaska), Bernie Sanders (Vt.) and Sherrod Brown (Ohio), among others. When Massachusetts Senator Elizabeth Warren joined the group, support reached critical mass and take-off velocity.

Conservative Democrats, organized as “The Third Way,” have long been used to making progressive ideas like expanding Social Security seem untouchable, even as they make the case for unpopular cuts to the program. But when Third Way leaders attacked Warren and the other senators, it was the congressional members of Third Way who ran from the attack. Rep. Joseph Crowley (D-N.Y.) announced that he disagreed with Third Way on Social Security. Rep. Ron Kind (D-Wis.) said he disagreed with the Third Way idea that “economic populism is dead.” And after pressure from Progressive Change Campaign Committee (PCCC) to clarify her views, Rep. Allyson Schwartz, a Pennsylvania candidate for governor and “co-chair” of Third Way, resigned from the group, called the Third Way attack “outrageous” and hastily announced her support for the plan to increase Social Security benefits.

We have truly reached a tipping point. Recurrently Americans have joined together in a populist movement to advance the interests of “the people” against “the elite.” Today, after many years of struggle, that new populist movement is rising to defend and expand Social Security. And the politicians had better lead or get out of the way.

Note: Some compelling polling from the Campaign for America’s Future Populist Majority webpage – for all those candidates up for election or reelection this year:

51% oppose the chained CPI (to limit the cost-of-living adjustment to Social Security benefits) and only 37% support it. Washington Post-ABC News (04/14/2013)

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About Roger Hickey

Roger Hickey is Co-Director of the Campaign for America’s Future. He was also one of the founders of Health Care for America Now!, a coalition of over 1,000 national and local organizations united to achieve quality affordable health care for all. He was also one of the leaders of the successful campaign to stop the privatization of Social Security, called Americans United to Protect Social Security. Hickey was a founder and Communications Director of the Economic Policy Institute, a Washington think tank that looks at economics from the point of view of working Americans. He was also a founder of the Public Media Center in San Francisco. A graduate of the University of Virginia, Hickey began his career in the 1960s as an organizer for the Virginia Civil Rights Committee.